Berkshire stock at $185? NYSE glitch briefly sends shares 99% lower

It’s been 14 years since the “flash crash” that sent large-cap stocks tumbling for a day. A few level-headed traders took advantage of that technology-induced share-price rout, no doubt. However, something like that could never happen in 2024 — right?

Of course, it’s not 2010 anymore and technology has advanced quite a bit, but Monday’s stock traders discovered that major exchange errors are still possible. It’s a weird and worrisome way to start off the week, and astute investors have every right to consider the startling implications of a glitchy, twitchy market.

Now, that’s what I call a bargain

Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) CEO Warren Buffett is a legendary bargain hunter. Wouldn’t it be ironic then if Berkshire’s Class A shares suddenly traded at a 99% discount?

Let me back up for a moment and provide a quick peek behind the curtain. Unlike people with well-rounded, fulfilling lives, I spend my scant free time scanning for stocks making outsized daily moves.

I’d thought I’d seen everything until, soon after the stock market opened on Monday morning, I discovered on social media that Nuscale Power Corp. (NYSE: SMR) stock was down by around 99% for the day.

Seeing this, I thanked my lucky stars that I had no position in SMR stock. Incidentally, Nuscale Power Corp. designs nuclear reactors, but this had nothing to do with the share-price meltdown (if you’ll forgive my pun).

Then I discerned what appeared to be a contagion of sorts. Soon after the news of the SMR stock wipeout spread, I found out that two much more famous names were also down 99%.

Those names were resource giant Barrick Gold (NYSE: GOLD) and, believe it or not, Berkshire Hathaway. More accurately, Berkshire’s Class A shares appeared to be down by about 99%, while the Class B shares traded in their usual price range.

At this point, I wondered if I was dreaming or perhaps enjoying a fantastic hallucination. Nothing unusual had happened in the gold market or to Barrick in particular. Yet, GOLD stock was down from its usual price of $17 and change to a mere 25 cents per share.

Meanwhile, even while Berkshire Hathaway’s Class B shares continued to trade at their normal price of around $410 per share, the Class A shares traded at the jaw-dropping price of $185.10 per share.

For context, Berkshire’s Class A shares typically cost around $626,000 per share. They’re meant for large-scale investors seeking to participate in Buffett’s portfolio performance.

For a hot minute, it felt as if anyone could “be like Buffett” and trade big-league Berkshire shares in their not-so-big accounts. Was this the real deal though?

No, you can’t get rich from a glitch

Alas, trading was quickly halted on Nuscale Power, Barrick and Berkshire Class A shares, and I wasn’t able to load the boat on these apparent 99%-off deals of the century. I must admit, I prayed to the market gods that these issues would go unresolved long enough for me to back up the proverbial truck.

Of course, that’s not how it works. There was zero chance that I would actually get to buy Berkshire Class A stock at $185 and change or Barrick shares for a quarter apiece.

When these stocks resumed trading after being halted for an hour or two, they were back at their normal prices. It was an emotional rug-pull, though I should have fully expected this.

Here’s what happened. It was a tale of the tape — literally — as the glitches were attributable to the Consolidated Tape Association. That organization doesn’t deal with physical ticker tape in this day and age, but it does provide real-time stock quotes.

According to the the New York Stock Exchange (NYSE) via CNBC, the issue “stemmed from the price-bands published by the Consolidated Tape Association,” which cited an “issue with limit up and limit down price bands, a mechanism meant to combat market volatility, between 9:30 a.m. and 10:27 a.m. ET.”

The issue is supposedly fixed now, and the Consolidated Tape Association will “revert back to” a “prior software program,” so this hopefully won’t happen again. If anybody happened to grab some Berkshire Class A shares at $185.10, that price probably won’t be honored, and the NYSE will likely correct them to the true price.

Thus, it was a great day for financial-news reporters and an unsettling day for folks who value true price discovery and reliability in the markets. This doesn’t all add up to a compelling reason to divest one’s stocks and live in a bunker, but it at least ought to raise serious questions about the major exchanges’ ability to manage their technology in a tech-dominated market landscape.